Lenders Law

Prize-Linked Savings Accounts (PLS accounts), also known as  lottery-linked deposit accounts , are an innovative financial product designed to encourage savings by combining the  security of a traditional savings account  with the  excitement of a lottery-style reward . Instead of offering higher interest rates, these accounts provide depositors with a chance to win cash prizes—without risking their principal. Globally, PLS schemes have been used as a tool for  financial inclusion , particularly to attract individuals who may otherwise remain outside the formal banking system. However, their compatibility with India’s regulatory framework raises important legal and policy questions. What Are Prize-Linked Savings Accounts? A prize-linked savings account offers depositors an opportunity to participate in periodic prize draws based on the amount they save. The core idea is simple: Depositors place money into a savings account. Each qualifying deposit ...

The Reserve Bank of India (RBI) has proposed the Master Direction – Internal Ombudsman for Regulated Entities, 2025 , to replace the 2023 framework . Issued under Section 35A of the Banking Regulation Act, 1949 and allied statutes, the new draft seeks to strengthen internal grievance redressal mechanisms and ensure speedy, meaningful resolution of customer complaints through a structured, independent review within each regulated entity (RE). This article compares the new draft with the 2023 Master Direction and highlights key changes. Topic Master Direction 2023 Draft Master Direction 2025 Appointment — IO eligibility IO: retired/serving GM-equivalent; min. 7 years relevant experience; not over 70; must not have been employed by the RE or related parties. Adds if serving, must relinquish prior post. Explicit permission ...

In a significant move towards regulatory simplification, the Reserve Bank of India (RBI) has consolidated the existing universe of regulatory instructions issued up to October 9, 2025 into 238 Draft Master Directions . This consolidation spans 11 types of regulated entities , including banks, NBFCs, payment system operators, and others. Importantly, the consolidation also incorporates Scale Based Regulations (SBR) for NBFCs , reflecting the RBI’s risk-based and size-oriented approach to supervision. As part of this initiative, approximately 9,000 circulars , including Master Circulars and Master Directions currently administered by the Department of Regulation, are proposed to be repealed . This is intended to reduce duplication, simplify compliance, and provide a more coherent regulatory framework for all stakeholders. Key Highlights 238 Draft Master Directions now consolidate prior instructions across 11 entity types. Scale Based Regulations (SBR) for NBFCs included to...

  Introduction: Why This Amendment Matters In the continuously evolving credit and regulatory landscape, timeliness and accuracy of credit data have become critical to risk assessment, early detection of stress, and better decision-making by lenders, regulators, and markets. The Reserve Bank of India’s draft “Credit Information Reporting (1st Amendment) Directions, 2025” seeks to strengthen the frequency and nature of data flows between regulated entities (banks, NBFCs, etc.) and Credit Information Companies (CICs). The key proposal: a transition to weekly submission of credit information to CICs. This shift is aimed at enhancing the granularity, freshness, and responsiveness of credit intelligence across the financial system. Key Proposal: Weekly Credit Information Submissions At the heart of the draft amendment is the proposal that lenders move from their current bi- monthly reporting of borrower credit data to weekly submissions . This change means that new loans, rep...

  In the past year, the Reserve Bank of India (RBI) has imposed more than 100 monetary penalties on banks, NBFCs, fintechs, and cooperative institutions. These penalties span a wide range of compliance failures—from customer due diligence lapses to weak cyber security, and from outsourcing gaps to violations of lending norms. While the penalties differ in size, they all point to a common theme: regulatory compliance is non-negotiable . Here’s a breakdown of the most frequent reasons behind these actions. Category Typical Lapses Illustrative Orders Key Directions Change in management Failed to take prior written permission of the RBI before appointing a director Grewal Brothers Finance Company Private Limited (15 May, 2025) Mahindra Rural Housing Finance Limited (28 March, 2025) Habitat Micro Build Ind...

S. No. Policy Relevant Provision of Law Objective Remarks / Implementation Insights 1 Business Continuity Plan (BCP) & Disaster Recovery (DR) Policy Para 62, Reserve Bank of India (Non-Banking Financial Companies – Managing Risks in Outsourcing) Directions, 2025 Ensure uninterrupted business operations during disasters or cyberattacks. Ensure vendors follow recovery protocols; conduct regular mock drills and resilience testing. 2 Fair Practices Code Para 7, Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Directions, 2025 Promote transparency, ethical lending, and borrower protection. Use plain-language communications; disclose all charges upfront; avoid hidden clauses. ...

S. No. Compliance Relevant Provision Relevant Form / Portal Timeline Remarks 1 Display following information: (a) name and contact details (Telephone/ Mobile nos. and email address) of Grievance Redressal Officer. (b) If complaint/ dispute is not redressed within 1 (One) month, customer may appeal to Officer-in-Charge of Regional Office of DNBS of RBI (complete contact details), under whose jurisdiction registered office of NBFC falls. Para 12 of Reserve Bank of India (Non-Banking Financial Companies– Credit Facilities) Directions, 2025 - Ongoing Published at branches/places of business 2 Display following information: (a) name and contact details (Telephone/mobile number and E-mail ID) of Principal Nodal Officer. (b) details of complaint lodging portal of Ombudsman (https://cms.rbi.org.in) Para ...